Borrowing money to comply with Florida condominium law changes? : what there is to know
In a late special session, the Florida Legislature passed and the Governor signed House Bill 5D which enacted significant changes to the Florida Condominium Act and several other sections of Florida law. These changes were enacted in response to the 2021 Champlain Towers disaster in which the condo structure collapsed and 98 people died. The new laws impose new obligations and responsibilities on condominium corporations regarding structural inspections of their condominiums, the disclosure of the results of these structural inspections and the obligation to collect reserves to pay for the maintenance and repairs of structural elements of condominiums. .
Many condominiums now face very significant financial obligations to comply with changes to condominium statutes. In the absence of “curative” amendments, each association will be required to engage approved engineers to prepare for the stage inspection and structural integrity reserve studies which will be required no later than December 31, 2024. The just obtaining these reports is expected to cost associations tens of thousands of dollars. Funding of capital reserves which in many cases have been forfeited for years creates the obligation to retroactively fund those capital reserves. Depending on the age and current condition of the condominium, such retroactive financing could reach hundreds of thousands of dollars. If inspection of an association’s milestones reveals underlying conditions that need to be remedied, such a rebuild could cost millions of dollars. Failure to obtain reports, fund reserves, or complete recommended reconstruction could result in fines being imposed on the association and even closure and condemnation of the condo building, leaving unit owners homeless. . Boards should also be aware that the changes create the possibility of personal liability on their part for non-compliance.